Transcripts For CNBC Squawk Box 20160801

Higher. Up by a quarter percent. The cac down by half a percent the ftse down slightly. After the friday night release of the European Bank stress tests, they were not nearly as stressful as some thought they should be. But you did see a lot of concerning things that came out of it. You can see unicredit is down by 7. 5 . Well find out how much it could impact the u. S. Markets in a few minutes. Lets check out crude oil prices because each though crude was up on friday, if you looked at last week, it was still down by over 2. 50. Oil sitting right around 41. 60. This morning, wti under additional pressure. That september contract right now is trading just above the 41 mark at 41. 07. Brent crude at 42. 93. It may be august, but things arent slowing down. Earnings and important Economic Data, all this as the dow starts the month on a sixmonth win streak. Today, we get the july ism Manufacturing Index. Tomorrow, june personal income and spending and your auto sales numbers. Wednesday it is the july adp report and ism services on thursday. The bank of england has the policy meeting. We get june factories orders finally the week is topped off by the july jobs report, the all important monthly payroll number. As for earnings central, the s p 500 report results this week, including pfizer, p and g, 21st century fox, tesla, viacom and others. A big transaction to talk about. Uber set to merge the china unit with rival Chinese Service didi. The combined chinese piece of it. Uber worth 60 billion. Eunice yoon has more in beijing. Eunice . Thanks so much, andrew. Didi under this new agreement is going to be acquiring all of ubers assets in china. That includes operations, the brand as well as the data. Investors in uber are going to get a 20 stake in the combined company, which is valued at 35 billion. In addition to that, didi is going to invest 1 billion in uber. Now that both companies have confirmed this agreement, it really does lay to rest the huge competition, the fierce competition between both of these companies. Both of the companies have been spending billions of dollars in subsidies to try to attract drivers as well as passengers. In fact, uber has already said that it spent 1 billion every year for the past two years in this country. The ceo just posted on facebook that the profitability element was the reason behind ubers decision. Now, at the same time, uber is pulling out of what could be a hugely lucrative market for it. It has a lot of potential. China just changed its regulations. So it made the ride sharing completely legal. But uber has been struggling to gain market share. The reason for that is that didi has been a formidable competitor. It has 80 of the market and also didi in the latest round of funding raised 7 billion. In addition to apple as being one of the backers, didi has the chinese sovereign well fund as a backer. Didi just pointed out that now it is the only Chinese Company that has all three major tech titans behind it as investors. Alibaba, ten set and baidu. A lot of competition taken away for both of these companies. Guys . Eunice quick question in terms of understanding antitrust laws in china or whether there are any. This would obviously combine just about everybody in this business, obviously the two other big guys became didi. This already happened the first merger. Now there wont be any competition. Is there any worry against china, the policy makers on this or no . You know, i was going to look into this as well. But im sure that there are regulations and antitrust regulations on the books. I dont know whether or not this is going to apply for this particular case. As you had said, there have been lots of different investors and its kind of unclear exactly whether or not the regulators are going to try to crackdown on this. I mean, there are some other smaller competitors out there. But its really difficult to say. What the other thing with this case that thats really interesting, its been raising concerns among those in the Tech Community that this could be the latest example of a foreign tech company that is going to suffer in in business environment. Because it had become more difficult for a lot of Foreign Tech Companies to operate because of the regulations as well as the chinese policies that tend to Favor National champions. Great. Thank you for that eunice. I should note because i talked to guys earlier. We were emailing about this, this morning. This could be considered a great thing for uber because, obviously, theyre not losing money. In terms of the overall uber valuation, which is 60plus billion. Part of the contingent of they were going to have a huge piece of china. A little over 5 in equity. 17. 7 of a preferred in this combined business. But the other piece of it, interestingly enough, two of the major investors are black rock and tiger global. There had been a lot of concern about both of them being involved in both of them. You have to assume today they are happy simply because theyre not losing money. The cover i its all paper. I would think the idea of competition, lowering at that point, were not going to be throwing good money after bad and continually losing money, you would think that would help the investors too. The cover story in the journal this morning is that when tech firms, to eunices point do well in china, like whack a mole. They get not just tech, who is winning . What u. S. Companies are really winning in china . In china . Can you automatically off the top of your said say you get response to that . If youre selling a lot of stuff, who is making a lot of profit . Every ceo we talk to, you talk to, its tough. Ibm and apple. Are they winning in. Not terribly losing. How about that. Thats the new winning. In other news this morning, reports say that tesla and solar city could announce their merger today. The two firms would then have to convince shareholders to back the combination. The move is part of tesla ceos elon musks socalled master plan. He wants to offer a Single Source of hardware to power electronic cars. Musk is the biggest shareholder in both tesla and solar city. We have black rock and tiger global, weve got musk here. Right. We had last week it was ellis sons oracle buying net suite. Nice work if you can get it. Squawk box to acquire power lunch. News at 11 00. Who signs off on that . Glaxosmithkline and Alphabet Life Sciences creating a new Company Worth 700 million focusing on fighting diseases by tarkting electrical signals in the body. Known as bioelectronics. Heres another story wooif been covering. Floridas Health Department is confirming that the first cases of zika that were likely caused by transmission of local mosquitoes in the local continental United States. Four people coming down with the virus probably contracted it in early july. The centers for Disease Control in florida Officials Say that the area of concern is limited to a square mile in the winwood neighborhood of miami. This is a downtown area where places are tightly packed. Its an Arts District type place. Where you see a lot of tourists who come in. Theyve been actively looking around trying to find mosquitoes that have the zika virus and they havent found any yet. Its no proof that it was not transmitsed by these mosquitoes. They say thats the most likely scenario. There are now 1600 cases in the continental United States. All the rest of them, we believe, are from travel abroad. Its just these four cases that have really spiked concerns. Despite the warnings that this was very likely to happen this year, Congress Left for vacation without appropriating a emergency funds to fight zika. Thats a huge problem because theyre now running out of funds to do this. In fact, some readers are now calling on congress to break their vacation, come back in and immediately appropriate some of the funding for this. By the way, think youre safe if youre not in miami. Theres a story in the New York Post that came in about how mosquitoes are swarming the subways of new york city. The warm and wet summer creating a bumper crop. Stagnant water a breeding ground for mosquitoes. Strap hangers seeing more than in the past. They swarm their eyes and nose when standing on the platforms. Thats going for us. A little bit of good news, its a different type of mosquito. Its a different type of mosquito. Not the 80s egyptee. There are others that carry the chikungunya and other viruses that goes all the west to california and north to maine. Thats a huge concern. Becky quick, hobby entomologists. I have concerns about all of these issues. Let me just zika expert. Is there anybody knows how much rain weve had . Its got to be a record. Nobody cares. Its rained every day. Youve got bugs everywhere. And congress is on vacation without putting the funding through for this. Fantastic. Here we go. We enter august on a sixmonth winning streak for the dow. The longest streak in three years. Futures indicating we should start higher. Nothing off the charts. But in the green nonetheless. European markets mixed. Germany up a little bit. France down a little bit. Oil quickly becoming the big market story once again. It is down again this morning. Nearly breaking below 41 per barrel. Were at 41. 11 guys. Its gotten whacked in the last couple of weeks. The tenyear yield, were at 1. 47 . Maybe time to get the refi ready again. Stronger against the yen and gold is mildly lower. Lets get a breakdown of what to expect in the week ahead in the marketsment joining us is jim tierney abcio. Allen, why do they do it that way . They put a little slice in the middle. Good morning. Good morning. Ubs owe portfolio manager. I dont know if you saw. There was a report out last week. This was something that i wanted to specifically ask you about. Our friend leon cooperman who has been the show for many years saying that when it comes to the s p 500, right now he thinks by the end of the year, its up ends up 8 . That means if where we are today, up about 6 , weve got 2 to go. Do you agree with this or disagree with this . I think the people are talking about a goldilocks snare dwroe scenario for stocks. You have a Federal Reserve not worrying about the event of the day and going back to the original plan. The Interest Rate environment can help the stock market. But you have black swans. The crude oil story, the mosquitoes, the combination if Oil Continues to go down, it will take the stock market down too . Most people priced in a 40 or 50 range in crude oil. If you break down below that range, you have a new world. Theyve talked about the transient effect. When does it become permanent . Where do you stand on all this . I think weve come really far really fast. Whats most interesting about the market is there has to be a change in the leadership groups. What led us in the first half, utilities, telecom and cyclicals, give way to health care and technology. When you look at the earnings last week, earnings were great. Why do you think were expecting a pullback . Up 9 since brexit. Up 20 since the february lows. Thats a pretty good move. Were 17, 17 and a half times earnings. Does that mean youre sitting waiting for this to go down . Weve sold a few things selectively. A little more than normal. Andrew, the concern that you have lower Interest Rates and that might be driving the earnings. I havent seen any studies that really break down what percentage of earnings are related directly to the Interest Rate environment. The fed starts to raise Interest Rates if you have another rate rant like a taper tantrum. You have Interest Rates go up quickly. We have to be careful of that at the same time. Isnt the reason the stock market has been going up because Interest Rates are so low and theres no other place to find yield. You could very likely see multiple expand if youre looking at comparative other place toss put your money that youre just not going to get any return . I think thats the exact issue. At the end of the day, this is supposed to be a market of stocks where companies have good earnings based on what theyre doing as companies. Not exclusively because Interest Rates are low. I think one of the key issues is, people are forecasting 134 of s p earnings for next year. If we do that, that represents 17. 5 growth year over year. I dont think theres a chance in the world we get there. With 1 gdp which is what we did in the first half, numbers have to come down. Oil back to the key point. Doesnt help. 40 doesnt help if Oil Goes Back to 45 or 50, its a different story. Were down 20 from the highs of crude oil. Its tough to see how we get double digit Earnings Growth next year. The gdp number got a lot of attention for being, quote, bad. The consumer part was better than expected. Consumer is 70 to 74 of total spending. I mean, can the consumer rescue this stock market . I think the consumer has been rescuing the stock market. Gasoline prices are going to fall yet again. That helps. Filled up for 40 this weekend. That was great. It doesnt get you look at the layoffs. Weve seen bigger layoff announcements. Caterpillar talked about layoffs. If you soo he that build, that takes the underpinning of the entire market away in terms of the consumer gets weaker. I think a big question is, you see the Federal Reserve over and over again, saying that Business Investments have been soft. Why is that . Why arent businesses spending in this environment where its so low . I think people have concerns about a new brexit. Brexit, i think, is a troubling thing in the sense that it was over so fast. This was saying that everyone was nervous about and then it happened and in two days, the whole story is over. Whats the next thing . I think the resolve that the Federal Reserve has coming out of brexit can be unease eye. Theres a Coalition Building in the house of lords in the uk to try to block the brexit. Basically, their congress for lack of a better term, their senate is trying to come together and find a legal strategy to block the brexit. Lets say it succeeds and we get headlines, brexit off. What would that mean for our viewers and their money . I dont know enough about the political process to tell you what the ramifications of that. Lets say theres no brexit. Brexit is on right now and doesnt seem to be hurting the markets. So if there is no brexit, would that be a leg up sh. You have to divide it between short term effects and longterm effects. Theyre concerned about the impact on england will be. England is 4 of the global economy. What is the impact of that. I think brexit is one of a number of things that can change things going on in the market. Jim and alan, thanks very much. Coming up, it was a weekend of donald trump. The gop candidate kicking off controversy with the nfl, billionaire mark cuban sounding off on it and cuban also making his pick for november and guess what . Its not trump. Plus, jimmy walker was dynamite. The 37yearold golfer capturing his first major. First, this day in history. Its a golden opportunity to experience breathtaking lexus performance in streetlegal form. For a limited time get great offers on our complete line of f sport performance vehicles. At the lexus golden opportunity sales event. Gain the freedom to fumble with the new water and shatterresistant Samsung Galaxy s7 active. Exclusively at at t. And im just a guy who wantsants to sell him that truck. Ck. So i used truecar. It told me what other people in the area paid for the truck i want. And because were a truecar certified dealership, i already know the truck he wants. So were on the same page before he even gets here. Its fair. And its fast. Look good . Looks great. This is how car buying was always meant to be. This is truecar. Welcome back toe squawk box. Jimmy walker was dynamite at the pga championship this weeken. Dino might. The first major title. A huge birdie putt on 17. It was enough to fend off jason day. Day amped up the game by sinking an eagle at 18. The check should provide some good times. This was amazing. Did you watch the end of this last night . Unlike the guy that im filling in for, i dont like golf. I dont like to play it or watch it. There was more spends in this. I am not a huge golf fan but it was amazing. It was down to the last shot. He controlled his destiny as long as he made at that final paragraph 5. You talk about trying to hit some of these putts. He hit one into the rough right before. Pulled it off and held his cool for all of it. I was watching the honda 200 on nbc sports network. Good plug. That was on cnbc and the formula one race that was how i spent my day. Lets talk politics. I can give you tv if you want. The commission on president ial debates rejecting Donald Trumps complaints that two of the three debates scheduled to take place during the nfl games this fall. The first conflicts with a monday night Football Game and the second one with a sunday night game. On interview, trump accused clinton of rigging the debate schedule. I got a letter from the nfl saying this is ridiculous. The nfl doesnt want to go against the debates because theyll be pretty massive from what i understand. I dont think we should be against the nfl. I dont know how the dates were picked. I dont know why those particular dates. You dont like the dates Hillary Clinton wants to be against the nfl. Like she did with Bernie Sanders where they were on saturday nights when nobody is home. The commissioner says its impossible to avoid all sporting events when it picks dates. The nfl sent him a letter regarding the scheduling conflict after the league said it never sent the letter. The dates were picked by the commission a year ago. September 2015. Before the nfl decided on its schedule. Little complicated little detail. Lets talk about more politics. Mark cuban throwing his support behind Hillary Clinton. He endorsed her during a surprise appearance at a rally in pittsburgh on saturday. Maybe not. If you were going to hear the sound, you would hear about cuban was swinging out at trump. He took the opportunity to bash trump. Opening his remarks by saying, hello trump in russian. He bragged that his tv show shark tank beats the apprentice. Cuban a pittsburgh native decided to support clinton because he says trump scares him. But he did it with a lot of bluster as well. Joining us more is john harwood in washington. John, theres never been a dull moment in this campaign. There hasnt been, becky. It was a weekend, even apart from the issues that you guys were just talking about, the debates and mark cuban, that donald trump was driving his party crazy. The reason was he sustained an argument with the family of that fallen muslim soldier who attacked the parents and attacked him at the Democratic National convention. Heres donald trump about that family on abc. His wife, if you look at his wife, she was standing there, she had nothing to say. She probably, maybe she wasnt allowed to have anything to say. You tell me. Plenty of people have wlit en that. She was extremely quiet. It looked like she had nothing to say. A lot of people have said that. Contrast that remark with how Hillary Clinton handled the question of the mother of the benghazi victim who attacked her at the republican convention. My heart goes out to both of them. Losing a child under any circumstances, especially in this case, to state department employees, extraordinary men, both of them, to cia contractors gave their lives protecting our country, our values. I understand the grief and the incredible sense of loss that can motivate that. Now, in that same interview on fox, Hillary Clinton raised questions as others have about Donald Trumps sympathies with Vladimir Putin, the russian ruler and donald trump seemed to affirm that argument in that interview on abc when he echoed putin he is justification for the annexation of crimea. This will be a continued whether donald trump is more sympathetic to russia than in americas best interest to be. Hillary clinton will be appearing with Warren Buffett touting another billionaire endorsement, guys. I want to bring in another guest. Ben white is politicos chief economic correspondent and a cnbc contributor. Ben, there were so many stories to follow. Were looking at less than a 100 days until the election and things are heating up rapidly. Yeah. This was not a good weekend for donald trump. We should start off by saying the way he talked about the khan family is morally reprehensible. Paul ryan, Mitch Mcconnell. They agree with that. They sacrificed their son in iraq. The first instinct that he has is to question them on religious grounds. Suggest that the wife was not allowed to speak. She came out and said she was too griefstricken to speak. She wrote a Washington Post oped on that. Had that and the nfl, saying the nfl wrote this letter, they didnt write the letter. Said on abc that russia had not incurred into ukraine. Of course they annexed crimea. There are a number of fronts where donald trump was disastrous this weekend. The question is, that impact him terribly in the polls. Hes done a lot of questionable strange things before. They havent really hurt him. Will these . I dont know. I expect when we see the polls come out, Hillary Clinton will have a bounce from her convention. Its still going to be close. Its still going to come down to the swing states is that were all talking about. This is far from over. From a politico perspective and for fellow republicans of donald trump, this was a terrible weekend for him. You know, if you talk about some of the politicians, paul ryan, Mitch Mcconnell, they said that they completely disagree with those comments. I dont think either one of them actually mentioned donald trump or stepped back from him at all. No. They didnt mention his name at all. They honor the sacrifice of a gold star family. That theres only one way to talk about the people, heroes o who sacrificed greatly for this country. There was no dee nuns yags of donald trump. Hell have to go further from this for republicans do this. What would he say . Who knows what he would have to say to get it from congressional leadership. They dont want to be disloyal. Theres a large segment of the republican electorate who is very much behind donald trump. Big risk for prominent republicans to publicly distance themselves and renounce their nominee. I would not expect to see that. What theyll attempt to do is simply not talk about and talk about their own agenda and senate races, house races. Paul ryan is very actively out there promoting his own growth, agenda on taxes and Corporate Tax reform, the other issues. I dont know, what do you hear inside the beltway in terms of how this goes over, how this happens . Inside the beltway is different than in wide swaths of the country. I think as ben described, Republican Leaders are going to treat donald trump at arms length, kind of like the mess you pick up in your house. Theyll hold it away from themselves. There are things that hes saying that are harmful to them. On the other hand, theyre scared of his voters. If you have a paul ryan or Mitch Mcconnell come out and say i reject donald trump, theres blowback for them within their party. Theyre going to try to navigate it the best they can. Its not very easy. Its especially difficult for senators in the swing states at that will determine who controls the senate next year. Kelly ayotte in new hampshire, pat toomey in pennsylvania. Rob portman in ohio, ron johnson in whichst wisconsin. They have problems every time donald trump sustains one of these losing arguments. Ben, as bad as the weekend was for trump, what if hillary couldnt get a doesnt get a wum bump in the polls. What would that tell you about trump and his campaign and the American Voter . That would tell me, first of all, that democrats should panic. All this time weve said democrats shouldnt panic. Come off the convention for hillary and all this stuff over the weekend, if she cant get a bump off that it would be problematic for democrats. It would suggest that trumps electorate is locked in. I think most it already locked in. Hes not going to lose a lot of support. Hes going to rise above the sort of mid to low 40s. He gets above that number and is close to 50, the democrats should worry a great deal. Then they need to start looking at the russ belt states like pennsylvania, michigan as we talked about on friday. Some of the states where ohio. Ohio is dead heat right now. If shes behind in wisconsin or some of the traditionally blue states where there are a lot of blue collar democrats to support trump lets be clear about one thing. Hillary clinton is ahead. Its a narrow lead. But shes ahead. Thats nationally and shes also ahead in most of the battleground states. Ohio [ overlapping talking ]. Hes basically at war with the popular governor, that tells you something. It tells you that there are a lot of republicans who support trump that dont agree with john kasich in ohio and his attacks on him. Ohio is always a tough state. Obama care i had it twice but narrowly. Its not a surprise that clinton is ahead in north carolina, in colorado, in virginia, in florida. On the money game, clinton has twice what trump has. 40 million to 20 million. Trump is having trouble with the billionaire class. Charles koch saying that another thing that thapd that didnt happen. He was going to vote for couldnt support either one. He called it blood liable. Trump rebuffed the meeting with the koch brothers. They declined to meet with him. Trump has a different version of history in almost every insta e instance. John good to see you. Ben thanks for coming in. Kanye west has a message for tim cook. Let the kids from the music. Well show you the hip hop artists latest twitter rant in a moment. Its a question we get from some of our largest banking clients. The face of their business was tellers. Then atms. Today its their mobile app running on the ibm cloud. Across every transaction, the hybrid cloud helps their data move quickly and securely. Our clients are building out features and pushing updates faster, on five continents. With the ibm cloud, they can move at the speed of any startup. Narrator kubo est place come on, this way. E. Narrator . Is in the forest. Kubo wow. Narrator so grab your loved ones monkey dont even. Narrator and explore a world of possibilities. Kubo its beautiful. Narrator visit discovertheforest. Org to find the closest forest or park to you. Little Entertainment News this morning. Kanye west taking to twitter with a message for apple ceo tim cook. Make a deal with jay z for Music Streaming Service title. Apple give jay his check for tidal. Stop pretending youre steve, referring to steve jobs. West is a cofounder of tidal. Its messing up the music game. Apple is interested in buying tied ament. Give me the money now is what hes saying . Give me the money now. Just give me the money and well stop feuding with you. This would not be a 3 billion dollar like beats. If you remember that. It was bought originally by jay z for 50 million. Even if there was a big multiple on that, youre not some of that is just pay up. Headlines rich guy urges Big Corporation to make him richer. Nothing wrong with that. Capitalism. We should have kanye on. When and if this transaction happens, we should have tim and kanye together. In the meantime, will antiestablishment and anger cause more defects from the European Union. Thats next. Plus, after nine years, jason bourne is back. I went to see it over the weekend. The top of the box office. The big money, the latest in the franchise made this weekend. Were back in a moment. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. Okay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. Welcome back to squawk box. Jay bourne is back at the top of the box office. Matt damon stars in the super spy franchise. Man, the audiences cant get enough of this. The film taking in 60 million this weekend. Okay. Lets talk antiestablishment and populism. It is all that anger apparently fueling the 2016 election. Also, across the pond. The same sentiment pushing the vote to victory in the uk. Will france and italy be next . Thats one. Big quest out there. Joining us now with more is the professor of International Politic at Tufts University fletcher school. A nonresident senior fellow with brookings institution. Thanks for being with us this morning. Your sense that were a frexit may be upon us . No. Im not as concerned about that. Brexit is disturbing. In some ways, the fact that brexit happened is causing people in this country and Continental Europe about going the same route. If you look at Public Opinion polls in europe, after brexit, youve seen support for the European Union go up in germany and italy and france. That might not necessarily be sustainable. Because the european economy is still stagnant. It does suggest i wouldnt count the European Union out any time soon. Dan, heres what im trying to get my head around. Theres two things going. Maybe theyre connected and maybe theyre not. Theres this idea of populism and antiglobalization. Are they the same thing is the question . Thats a great question. I would say no theyre not. In the sense of if you look at Public Opinion polling, there isnt that much hostility to globalization, at least the economic parts of it. Things like free trade or movement of capital and so on and so forth, indeed, nbc, wall street journals latest polls show the majority still support trade in the United States. Dan, but both parties, were talking about Hillary Clinton and donald trump who couldnt be two different people have the same opinion of things like tpp. Thats correct. Because it turns out that opponents of trade feel much more strongly about it than advocates of free trade. A majority of americans, since 2008 have been supportive of the idea of free trade. If you ask people about the strength of their opinions, its the protectionists that have a much stronger view about this. As a result, there are more vocal lobby and in politics, the squeaky wheel tends to get the grease. The other thing that i would point out, though, populism as you talk about it, really at this point is a very nice word for opposing immigration. Thats the one area where you have seen some degree of hostility. Both in the United States and in the European Union. I would argue thats the thing that triggers. Kind of trump coalition. Even there the polls show a majority of in the United States believe that immigration is a net positive for the United States. How do you think about populism, if you will, i put air quotes around that and the antiestablishment fever or fervor if you will . I would say two things. The first is no doubt there is a resentment in a large part of the United States that havent done terribly well economically over the last 15 years and believe that the country is changing away from the way that he sort of have this nostalgic view of the way the country used to be. Thats certainly fueling this kind of resentment. But the second thing, i would stress this, it turns out economic populism is not as popular as people think. Theres a strong and vocal minority opposed to these things but thats far from the majority view in the United States and far from the majority in the European Union as well. Dan, you make it sound like people think their circumstances are worse. If you look at the data, there are huge pockets where people are worse off, where their standard of living has gone down and wages gone down. I dont mean to suggest theyre incorrect in thinking. Sometimes the people argue that it was so much better before and we all have nostalgic continuinged views of our youth. Go back to the 1950 ez, sometimes forkt there was gender discrimination back then. Economically, it might be true for a lot of people. Im not sure its socially true for all americans at all. Fair enough. Dan, thanks for your perspective this morning. Appreciate it. Thank you. Coming up, how low can gasoline prices go . Oil prices back in bear marketer torrey. Down again this morning by the way. Most of the nation starts to see prices at the pump fall below two bucks a gallon . 1. 73 in teaneck, new jersey. Fill em up. Later on today, dont miss out on this, bill fred frosts interview with jpmorgan chairman jamie dimon. Thats at 1 00 p. M. Eastern. Stay tuned, youre watching cnbc. First in business worldwide. s d network that gives 35,000 fans a cutting edge game experience. Or the network that keeps a leading hotel chains guests connected at work, and at play. Or the it platform that powers millions of ecards every day for one of the largest greeting card companies. Businesses count on communication, and communication counts on centurylink. Welcome back. Oil may just be your biggest money story right now. Rather, oils recent drop. Crude oil tumbling to a threemonth low. It means its back in bear marketer torrey. Gasoline prices also following suit. Down about 7 over the past month. Jackie deangelis joining us with more. Jackie . Good morning, guys. Gas prices astonishing most people for this time of year. Its only august 1st and the National Average for a gallon of regular gas is 2. 13. It was 2. 66 last year. Now, typically during the summer, we do see prices rise. Not this year. The problem, not just an a refi, so basically whats happening is this. Refiners processing a lot of gas this summer because it was relatively cheap and while demand was stronger than normal, it wasnt enough to churn through all the product. So what happens now, well, they are going to reduce the runs at the refineries. Some have already started making their winter blended gas instead and thats going to be until the inventories decline. Theres a bigger story here and its crude oil. You may have noticed as you said that the prices are down about 10 since the high in june. Cheap oil brought these rig counts up, a fear now that higher production will only hurt the situation, not help it and seasonally, of course, summer demand in the u. S. Is going to drop off soon. When it does, there could be more pressure ahead. Barclays was out with a note this morning saying, and i love this phrase, the drain is clogged and it literally s. Things to think about when it comes to oil prices, not just that the Major Oil Producers are pumping away but will International Demand in europe and china hold up and the nonfundamental factor, the dollar, fed expectations will influence fluctuations and that will move the crude market. Bringing it back to gas prices if we move lower from here sub 40 crude you could see the average go down 2 by labor day, pretty much unheard of and you mentioned in new jersey it already is. It is. I think its the only thing that new jersey is known as having the cheapest of. You know, youre down at the nymex every single day and weve talked a lot about this on power lunch and how surprised are people surprised by the drop in oil . Reporter they are surprised and not. They were expecting it to come as a seasonal drop but they were expecting it in late august and sort of september and the fact that its happening right now is surprising people. We did think we were going to see another lower. It appears that its happening technically speaking because thats really what they follow. If they break this 40 level, all bets are off. It could be going lower. To put a point on it. The market freaks out because its a reflection of the demand picture and thats a reflection of a slowing economy backed up by the gdp numbers we got last week. Do you think this is demand, supply or both . I think its a little bit of both at this point but the supply problem weve been talking about for the last two years really never worked itself out so demand was always the caveat. Demand was boosted we would see more of a balance and its just not happening. Remember, the street right now is looking for this rebalance in the second half of the year. A lot of estimates are calling for oil over 50. The companies, brian, you know from the earnings last week, they are not as optimistic. They are cautious and when the Companies Speak you should listen to them. The problem, of course, now once again Many Companies are operating at below their they have negative cash flow. Right. And thats. When youre paying dividends because youre borrowing you can only sustain that for so many quarters. Really sets up a bit of a shaky situation. Joining us now also matt smith, director of Commodity Research at clippard data. We know whats happened. What do you see happening with the price of crude oil . Sure, good morning. I see it going lower from here. As youve just been talking with jackie, we have this glut here in the u. S. , not only for crude but for products as well. Were actually at record inventories for the two of those. Seeing 1. 39 billion barrels. Thats 113 Million Barrels higher than it was this time last year. So we have this glut in the u. S. Of products and of crude. But additionally as well. Something that i talked to you guys on back on june 10, when i said prices were going to move from 50 down to 40 was the fact that china has been importing so much crude, so much more than its demand needs so they have been stockpiling and the concern there is they are finally reaching their brims and they are likely to see their demarched pull back because of that and so we likely to see prices come under pressure Going Forward. And he brings up a great point because its not just storage in china we have to worry about its the crude oil storage here. So many people have been saying with all of this crude and gasoline where are we going to put it and the industry has come up with innovative ways. They are storing on rail cars and storing on loading and well have a storage problem, too. Not to get too wonk, but in order to do what jacuzzi saying, you have to be in contango, future prices are higher than current prices because even then your cost of storage should be mitigated by the amount of money youre going to pay or make when you sell that good later on. True with every commodity. If contango starts to roll over, whats going to happening to all of this oil and storage . People will dump it on the markets because they will see the future profits get wiped out. Were seeing floating storage, really strong levels already. We see off singapore, track this stop, near records in terms of floating and singapore is a parking lot and a lot of crude cargos do not have buyers so were seeing it build up there. Where the teapot refiners are in china, weve seen the crude offshore drop off as their demand has dropped so we are seeing floating storage being strong and that is, again, indicative of all this crude awash in the world. Specifically relating to the u. S. Were seeing gasoline cargos going into the new york harbor and being diverted away. Seeing one being diverted through the panama canal and through the west coast and theres all kinds of dynamics here and not only is there floating storage for crude but also for gas line now it seems. Yeah, and the point you made, brian, is really important. If people start to dump some of that oil on to the market it only adds more pressure. A pleasure. Matt, thank you. Thanks. When we return, jobs in america. The countdown to the next employment report starts now, and Consumer Products giant newell bronze posting better than expected results. New ceo will join us first on cnbc coming up in the next half hour. Hello prashant bhuyan. Cofounder of the Fintech Services startup. Hello watson. Your analysis of social media and conversations on various trading floors, helps us uncover insights. Insights that help investors predict market closes, well before markets close. You know, your analysis has helped us improve our predictive accuracy by over 500 . 550. 2, to be precise, but we can always do better. I like your attitude watson. New this morning, irish is set to merge its China Business with its rival in a 35 billion deal. Goldman sachs downgrading equities. In this hour the deal landscape, the Global Markets and what you should expect this week as we head towards jobs friday. Well break down what you need to know. Donald trump calling a personal foul against the Debate Committee over scheduling two debates during nfl games. I dont think we should be against the nfl. I dont know how the dates were picked. The Debate Committees reaction. Plus, what you can expect on the campaign trail this week is straight ahead. Plus, jimmy walker was dynamite over the weekend. Theres your champion. He holds on to win the pga championship taking home his first major title. The second how of squawk box begins right now. Good times, any time you need a payment live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box, everybody. This is cnbc, first in business worldwide. Im here with Andrew Ross Sorkin and brian sullivan. Lets take a look at futures. You can see theres green arrows. The dow futures right now indicated up by about 25 points and s p futures up by two and the nasdaq up by five. Andrew. Making headlines this morning. Warren buffett is the latest Business Leader to be campaigning with the democratic president ial candidate Hillary Clinton. Hell be introducing clinton at a Campaign Event in omaha which will highlight a study showing the benefits of her economic proposals. Parent alphabet forming a 715 million joint venture. New companies are going to be focused on fighting diseases through a field known as bioelectronics which targets electroimpulses to help treat illness. Looking for upbeat Investment Advice this morning, this wont be it. Gunned lach selfsays sell everything. Hes also gone massive negative on treasuries. He does, however, like gold and gold miners. Didnt say anything about bitcoin but maybe he likes that, too. Brian. Shares of solar city are halted right now. News pending earlier reports that tesla and solar city could announce they have agreed to a deal. The two firms would have to convince shareholders to back the combination. The move is part of elon musks strategy of his master plan. Musk wants to offer consumers a Single Source of horde wear to Power Electric cars and has the biggest shareholder in tesla and solar city. Halt federal and when stuff happens and when it breaks well have it right here. Meantime, another busy week for Economic Data and earnings. I know youre excited, steve. You get the july ism Manufacturing Index. Tomorrow, june personal income and spending and july auto sales. Wednesday, the july adp report and ism and thursday the bank of england has its jolly old policy meeting and finally the week is topped off by the july jobs report on friday. Now as for earnings, more than 100 more companies in the s p 500 will release their numbers this week, including but not limited to pfizer, p g, twrner, 21st century fox, the aforementioned tesla, viacom and kraft heinz. Goldman sachs has cut its threemonth rating as its risk indicator has turned neutral suggesting markets are more vulnerable to growth and policy disappointments. Goldman sachs says the recent rally in stock has been driven by light positioning into the brexit vote and a search for yield. Also, some notable comments from new york fed president bill dudley earlier this morning in indonesia. He says the markets should not be ruling out the possibility that the Federal Reserve will actually hike Interest Rates once again this year if the u. S. Economy improves significantly. Still, dudley warns that lackluster Global Growth is limiting the feds policy options. He is urging caution on raising rates following the brexit vote and the big gains for the dollar. Stocks looking to bounce back this week after that disappointing gdp number on friday. The focus this week will be on friday with the jobs numbers. Steve liesman joining us with more on what we can expect as we just noted you were fist pumping. Were you excited. Been kind of slow. All about earnings and politics. Who wants to cover politics. You were right to read dudley without appropriate skepticism. They might do it this year if the economy improves significantly. Hes raised the bar there. Question of the week, will 177,000 jobs and a 4. 8 unemployment be enough to calm fears after the disappointing 1. 2 gdp report. Coming in at half what the street was looking for. Forget rail hikes and the worry now is about whether recession is ahead and some people sailed that. The big story capital spending. Whats happening with business . Its now down three quarters in a row, negative that is, part of it is the decline in oil field summer and some are blaming broader uncertainties around brexit, the recent decline in earnings and the overall regulatory environment. Great oped in the wall street journal. New york fed president bill dudley saying in indonesia business investors will likely, quote, remain soft as profits have stagnated and Election Year uncertainty could act as an additional depressant. It whacked half a point off of growth so 1. 2 would have been 1. 7. Longer term workers wont have the machinery and technology to increase improvement. Business investment that is shrinking on friday, we see how things meet. Are businesses cutting back so much that they arent hiring and that would comean consumers are going to have a hard time holding up this economy. Okay. Lets get a check on the markets right now after both the dow and s p snapped a fourweek win streak. Joining us right now is stifels fixed economic and our cnbc contributor. Good morning. You heard goldman sachs. You heard me read that. Does that make sense to you . It does. Youve been negative on it for a while so maybe its an unfair question. I see the widening disconnect between the underlying economy and the earnings fundamentals and that gap continues to widen to almost historic levels if you look at net worth relative to personal income so i think the markets are very dangerous here and ive said that before, of course. I think another analogy ive given speaking to what Jeff Gundlach, a few years ago i used beer goggles saying qe reduced at asset prices and theres been a search for yield that has made investors forget about the risks of capital loss only for the reward of a yield that is pretty microscopic. I want to find out what youre doing in that. Are we wearing beer goggles. Alerts on solar city. Solar city halted for news. There had been that merger offer from tesla that had come recently, and so we were expecting this, but there are some strange alerts that are coming out with this. They are saying on july 31st tesla and solarcity entered into an agreement and planned for a merger. There is a termination agreement. If the merger is terminated under certain circumstances, i dont know what those are, solarcity will be required to pay tesla a termination fee of 78. 2 million. For the solar city shares every share of common stock will be converted into the right to receive 0. 11 shares of tesla common stock. Par value of. 001 cents per share. Well, thats theres the number, becky, so if if at. Heres where our viewers are hopefully matter than i am. I did some quick math hon my iphone. 11 shares of tesla at 2 347b9 34. 79 is 29. 88. Solarcity closed at 26. 70. And its already trading up. I want to be clear, folks. Im just doing. 11 on teslas Closing Price on friday. May be wrong. Stock transaction, not cash, burks again, that number would indicate its below where it closed on friday and below where solarcity was trading in the premarket before it was halted, it looks like. If this is right, its a take under. I should also mention that there is a go shot provision for this for 45 calendar days following the signing of the agreement. The company may solicit, discuss or get into any alternative proposals. Not sure who the buyer will be on that. Very hard to think that somebody else is going to emerge. Andrew, this is your world, deals, right . If youre solarcity and youve already got this sort of, you know, combination because of must youve got to put the go shop provision in there, dow do you not . Hey, were looking for the buyers. Its an insurance policy to when the shareholders sue, which invariably they will. Its to suggest that they have tried their best and i emergency they will hire if it doesnt say already that they will hire a bank and they will give them an incentive knee to go out and try to find somebody and perhaps that will happen and unlikely given that elon musk is so tied to this business nobody as a buyer wants to step into the into a deal like this because it becomes particularly complicated. I think were were getting, again, to the numbers here, and this is what everybody ultimately cares about. If youre a solar city share herald, how much money am i going to make . The initial reaction and math is correct, youre not going to make anything off this deal because at. 11 tesla shares youre looking at high 25s and maybe low 26s depending on where they price tesla stocks. Why is the stock trading at 28. 68 . Depends on what the. 11 is not trading right now. Still halted for news. So the numbers were looking at are not wright. The numbers were not reflective active trading. Were supposed to be talking about this at 8 00 a. M. , less than an hour from now and the numbers youre looking at right now, the stock is halted. Okay, fair enough. Yeah. It is a 2. 6 billion merge and solarcitys market cap is 2. 65 billion and phil confirming it doesnt look like there will be any kind of a premium paid. Thats what the stock was frayeding at before saying this is basically turning into a take under of all things. Yeah. Meantime, lets get back to our conversation about the markets. You had tipped us over on the beer goggles idea, back to lindy and beer goggles. Are we wearing beer goingles . If you can accuse anyone wearing beer goggles its the more hawkish members of the fomc keeping the idea of a near term rate increase on the table. The disappointing gdp report and talking about an average growth rate of 1 across the First Six Months of the year. The Business Investment continuing to exacerbate the steep downward trend. Really looking to the consumer as the sole support, but, of course, without robust job creation and Income Growth we would expect the consumer to pull back markedly in the second half of the year so really no, quote, rebound in sight and the Downside Risks have diminished. All of the data supports the idea that the Downside Risk has increased Going Forward. Let me just push back a little bit because there is an optimistic scenario or not quite a dire scenario. I dont know how optimistic it is, especially when you have to hang your hat on 2 growth and thats this. The inventory downturn that we saw took off 1. 2 Percentage Points of growth. That is, if we werent destocking the shelves inextricably we would have had a 2. 4 growth. Government spending has to decline and not expected to continue which is to say it wont be that hard in the Third Quarter to get back to 2 growth. How do you respond to that . I would say, first of all, strip out all the negative components certainly you can make the growth report that was quite impressive and Going Forward the biggest thing we have to look at is the disconnect between the relative strength of the consumer and the very strong weakness or very significant weakness on the business side. Businesses are not investing or growing or developing. They are not creating the type of job and Income Growth needed to support that above 4 activity on the consumer side, so forget government. Forget inventories for a second and just look at the two key components of the economy and without businesses growing i really dont see the ability for the economy to rebound above 2 in the second half of the year. And now we have questions about the consumer that i think the ceo of ford laid how the when they reported earnings talking about a second half downturn or a year over year decline in retail sales. Weve seen some really sketchy comments from some Restaurant Companies talking about come skittishness on the part of the consumer so thats also debby downers. The trouble, andrew, when you read the journals oped from the weekend neither candidate provides in their opinion a progrowth strategy. Trump has talked about reducing regular lake, perhaps reduce taxes, but other side of the trump coin there is the concern about protectionism and tariffs and, of course, clinton with her companies have to pay their fair share so its hard for business look to the horizon and say help is on the way. What are you going to do about it, if you were really managing money, what are you doing . Im of the opportunity, to meet u. S. Stock market is the most expensive in the world. The bert opportunities are in emerging markets flower bear markets over the past four or five years. A lot driven by commodities. Im in a big fan of gold and silver . Linds. Still facing the lackluster activity, still the prettiest girl in the ugly girl contest. U. S. Economy is still growing and relative to our counterparts in japan and europe, were still far outpacing what were seeing in terms of activity abroad. Prettiest girl in the ugliest girl contest. Glad i didnt say that myself. Appreciate that very much this morning. Peter, thank you. When we come back. The ceo of newell rubbermaid, Newell Brands, talks about the strength of the consumer and its most recent quarter. And later a vulture is circling. Wilbur ross is our guest and well talk trade and what he sees shaping up in this economy and election season. Squawk box will be right back. We got another one. I have an orcogram for an owen. Thats me. You should hire stacy drew. She wants to change the world with you. She can program jet engines to talk and such. Her biggest weakness is she cares too much. Thank you. My friend really wants a job at ge. Mine too. Im a wise elf from a far off shire. And sanjay patel is who you should hire. Thank you. Seriously though, stacy went to a great school and shes really loyal. You should give her a shot. Sanjays a team player and uh. It is time now for the 9 00 squawk ceo call. Consumer Goods Company Newell Brands which owns brands like el mers glue, mr. Coffey and sharpie markers and a number of other things beating top and bottom line expectations in the last quarter. The first report since newell combined with fwelo brand powerhouse jardon corporation. This is very fortuitous timing and sometimes it just works out like that. Did a segment on how the consumer may be rolling over. You sell everything to everybody. Is the consumer rolling over . Weve had a very good First Quarter together, top line beats and strong bottom line beats. This is not accounting tricks or buybacks . You actually made more money. Part of it is the jardon business but the core sales growth was up 5 globally and in north america up 6. 7 in the Second Quarter. Why is all we hear for the last, i dont know, five years, is that the consumer will imminently roll over . I think the environment our market growth, for example, a good measure of consumer involvement in our categories is pretty much where it was about a year ago. I always encourage my team to to think about are ideas trumping the macro and in the consumers good space you have to be orient that had way and focused on brands and innovation and think you can beat the market growth. Whats hot right now . What part of the consumer then is spending . Look, we play with everyday products and basically in every household in the u. S. And in every room in the house, so were we play in lots of different segments. We had strong growth in writing. Strong growth in our baby gear business. Strong growth in food preservation and produce preservation and strong growth in Yankee Candle and the appliance business so in the heart of our business we saw a very, very good quarter. What drives that growth sin ovation and brands. Youve got to come to market with differentiated product propositions. Consumers see value in it and they are willing to pay for and we did that very well in the Second Quarter. Our innovation funnel probability strongest its been in the last five years. Go ahead. What type of things do you do for Yankee Candle company . If growth was strong there, whats an innovation in a candle in. Its interesting. One of the things that that group is doing really really well is customizing candles. Can you upload a pdf of a picture and put it right on the front of your candle. Look at that. Youve got your own personally branded Yankee Candles here. Wow. Customization is really interesting and new threat of growth for a business like yankee. All kinds of different dimensions that you can create differentiation with. Something as clever as customization through yank and an idea like extend fit car seats for babies, sitting rear facing longer is the safest position you can be and we Just Launched an idea based on a differentiated Product Design that allows you to have your child sit rear facing longer because its more comfortable and extends the leg pog and your child is not bunched up. May be a little off kilter here. We talk about how houses steal business from things. If you buy a house and youre saving money, you know, you wont go out and buy a bunch of jeans. Birth rates are up dramatically on the table. I have a year and a half son and surprise, becky having and you wonder if that is siphoning money away from other parts of the economy as well. If people are having kids, their purchases are very specific. Our baby business grew over 11 in the Second Quarter. It it really. I dont think its driven by the macros. I think its driven by the innovation and the strength of the graco brand. You have a new brand baby boom. Certainly benefit from tailwinds. Wouldnt say weve got them but ideas trumpet macro n. Consumer goods if youre orient that had way can you grow. In terms of retail charges imassume walmart is your biggest seller. When look at walmart relative to amazon, walk us through how that looks right now. Our philosophy is we want to win with winning cut mers and want to reach consumers where we shop. We had very strong ecommerce growth but not just in pure play ecommerce like amazon and like bricks and mortar. Com and target. Com and in our direct to consumer direct activities which quite frankly the jardon team was more involved in. What percentage is direct to consumer right now . Direct to consumer, small bit, 150 billion business in the u. S. And growing small double digits and the vast majority of our ecommerce business closing in on 1 billion globally, pure play, amazons. Do you get numbers from walmart as to whether they sell in a bricks and mortar store . Do you actually get that data . My sales team can see dotcom whats bricks and mortar. We track it separate from dotcom. Important to understand where the consumer is and we have to make sure that our share of market in the developing channel is greater than our share of market in the general market because otherwise we mix our shares down as consumers increasingly shift to those channels so really, really important trefnltds i couldnt be happier with the performance of the company in the Second Quarter, particularly in the environment that were in where were going through a massive amount of change so the ability to deliver which simultaneously changing is is quite a good outcome and i couldnt be prouder of the team for doing that. Mike. Thank you for coming in today. Sure. Glad to be here. When we come back, Hillary Clinton defending her record over the weekend as she wraps up campaigning in key battleground states. Meantime, donald trump is pushing to reschedule two president ial debates. Well get you up to speed on what you need to know for the political front this week. Squawk box will be right back. [announcer] is it a force of nature . Or a sales event . The summer of audi sales event is here. Get up to a 5,000 bonus on select audi models. Thats why a cutting edgeworld. University counts on centurylink to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. Coming up, jimmy walker capturing his first major title holding off jason day by one stroke. Highlights coming you have after the break and wilbur ross joins us to talk the markets, the economy and, of course, the political landscape. Has a new oped out. Take a look at u. S. Equities futures this hour. Dow looking to open 27 points higher. Back in a moment. Youre here to b welcome back to squawk box this morning. Among the stories front and center, a big deal to tell you about. Tesla and solarcity have announced a deal to combine in an all stock transaction. Both companies, of course, controlled by entrepreneur elon musk. We did know the transaction would come. Solarcity being valued at 25. 26 a share. For the next 45 days they will be out there looking for another buyer. This stock is actively trading. Before it was halted it was up by as much as 7 . It gave up that 7 gain and is now down by 4 as a result of the price. Meantime, two economic reports on the agenda today to keep your eyes on, august getting under way. Well get the institute for supply management. July Manufacturing Index as well as june construction spending. Both come out at 10 00 eastern time and then the other big transaction in the morning, perhaps even bigger, uber merging its china operations and the uber founder will join dds board. Uber throwing in the towel in china where they have been losing a ton of money. A big transaction and a lot of people will be talking about that. Watching this weekend, jimmy walker was all over the pga championship and leading that for most of the four days of the tournament. Walker winning his first major title at waterlogged Baltusrol Golf Club in new jersey. A key bunker shot on 10 for a birdie and huge birdie putt on 17. Enough to fend off jason day. Walker is an avid astronomer and sends us pictures online and nasa has even purchased some of his pictures. Hes sponsored on the pga tour by the telescope company celestra. Lets talk politics. John harwood joining us now. Job, start where you want because this was a i dont know how else to say it. It was a heck of a weekend. Every day you picked up a paper and trump was on the front. Reporter well, brian we talked last hour about republican concerns about the fight that donald trump picked with the family of that fallen muslim soldier that criticized him at the convention, but there are also rising concerns about his attitude towards Vladimir Putin and russia. Those were fanned last week when donald trump publicly invited russia to hack Hillary Clintons emails. Heres how Hillary Clinton addressed theish iyesterday on fox. We know that donald trump has shown a very troubling willingness to back up putin, to support putin, whether its saying that nato wouldnt come to the rescue of our allies if they were invaded, talking about removing sanctions from russian officials after they were imposed by the United States and europe together because of russias aggressiveness in crimea and ukraine, his praise for putin which is i think quite remarkable. Reporter so what did donald trump do yesterday . He actually backed up Vladimir Putin again with respect to the annexation of crimea. I have my own ideas. Hes not going into ukraine, just so you understand. Hes not going to go into ukraine. You can mark it down, put it down, take it anyway. Hes already there. There in a certain way. Have you obama there and frankly that whole part of the world is a mess under obama with all the strength that youre talking about and all of the power of nato and all of this in the meantime hes he takes crimea. Hes sort of but you said you might recognize that. Im going to take a look at it, but the people of crimea from what i have heard would rather be with russia than where they were. Reporter there you have donald trump seeming to justify russias seizure of crimea. This is something that Foreign Policy experts in the United States are not pleased with. They were criticizing him yesterday for saying that. Voters are going toe have to sort it out. We do have one snap poll post convention from cbs this morning which shows Hillary Clinton moving to a sevenpoint lead over donald trump, 4639. I caution everybody to discount polls taken immediately after major news events, but thats one indicator we have right now. John, thank you very much. John haarwood. In other political News Donald Trump is doubling down on trade arguing Hillary Clinton switched her stance on the transpacific partnership. At a press conference the gop nominee saying clinton was for the tpp. He called the trade agreement a horror show and also said, quote, it would be almost as bad as nafta which her husband had signed and which he says destroyed the country, destroyed manufacturing in the United States. Joining us right now is well burr rocks the chairman and ceo of w. L. Rossandcompany and recently opinioned an oped titled we need a touch negotiator like trump to fix u. S. Trade policy and wilbur, thanks for being here today. Well, thank you for having me on. Lets talk about trade because its something that most Business Leaders say that they want to see free and open trade. Now it comes down to whether you think these adwreemts that weve negotiated to this point are free trade or not, and thats where you take a big issue. You dont think we get a fair shake in many of the trade deals that weve signed. I think theres a big difference between the impact of trade agreements on Corporate America and the impact of them on mr. And mrs. America. Corporate america has adjusted to them by investing lots of capital offshore. Its fundamentally a lot of these trade agreements have added to the outflow of factor yield from the u. S. To other countries, so Corporate America can take very good care of itself. The problem is it leaves behind the jobs. What were doing is were exporting jobs and importing products instead of exporting products and keeping jobs. How do we fix that because, look, these trade agreements have been in place for a long time. We can say we want to renegotiate them but its not so easily done. If it winds up that we shut ourselves off from maybe 959 of the consumers in the world, will we still fare okay . Will we do okay under those scenarios . Well, first of all, were not cutting ourselves off from 95 of the consumers in the world. We are the largest single marketplace. A number of people, you have to multiply by their disposable income to get to market size. We are the biggest market. The problem with our trade agreements is several things. First of all, we usually make our concessions early in the process. The other entities make theirs later, but we dont have any mechanism. No automatic snapbacks in most of these agreements and, therefore, the later concessions from other countries either dont come or come later or get watered down. Second, theres never ever any automatic reopener if the trade agreement didnt work out the way that it was supposed to. So whereas with nafta the clintons said bill clinton said that it would create at least 200,000 jobs by 1995. Nafta was signed in 1993. In reality we have lost several hundred thousand jobs and our trade deficit with mexico has soared. Its not mob to say that that agreement was a net job creator. It wasnt. When you have a net trade deficit in manufactured goods, youre taking jobs out of the country. Again tpp sorry, go ahead. The tpp, according to cnn, Hillary Clinton lobbied for it 45 separate occasions. Now shes suddenly is saying now that Bernie Sanders and donald trump have oppose it had, now shes suddenly saying she opposes it, but you notice she hasnt said what did she miss the first 45 times she recommended it nor has she said what it is she would do to change it to make it better. And there is there was the uproar with Terry Mcauliffe saying shes in favor of it and if she gets elected she will be back in favor of it. Enwhat do you think of the trade agreements . Any way to reopen snem. Yeah, whats needed in the agreements is automatic mechanisms for simultaneity and there should be forecasts of what they should do and if other countries use nontariff barriers because our trade agreements for the most part dont deal with the nontariff barriers and usually burdensome customs and inspections, great delays in paperworks all kinds of ways, fiddling with the valueadded tax which is one of the biggest abuses of all. The agreements just dont address many of the things that other countries use to hurt us. Take v. A. T. All the big trading partners of the u. S. Have a valueadded tax. We only have a Corporate Income tax. Value add tax under wto rules is rebatable and is rebated to the exporter when the goods leave the country, but the wto will not permit American Companies to receive rebates of their Corporate Income taxes on their exports. Right. Our congress three times tried to pass laws that would conform with w wto. Every singl time wto said not good enough. American companies cant get taxed rebates on exports even thundershower our competitors do. It was written in large support of donald trump and his views on trade. I want to get your thoughts on some of the comments he made over the weekend and comments made about drew. As you know, theres been a bit of a controversy about what he said with the khan family and also with ukraine and separately with the nfl. Harry reid said this over the weekend said donald trump is a sexist and racist man who insults gold star parents, stokes fever muslims and sows hatred of latinos and he should not be the countrys leader and republicans have a responsibility to do that. I watched the original statement that trump made and frankly while i think it was a bit ill considered i thought he was joking about it. I dont think that he really was trying to insult anyone, and i think the very strong commendation by Vice President ial nominee pence tried to clarify that situation. I think thats not really what trump was saying. Trump was focusing on a very different issue which is a very real issue and that is the problem of the muslims who are doing bad things. I dont think that he was really intending to attack that family. Although hes just tweeting this morning more about it and says mr. Khan who does not know me viciously attacked me from the stage of the dnc and is now all over tv doing same. Nice. Would you rather he stop . It was a very vicious attack. There was no basis for mr. Khan saying that donald trump has never read the constitution of the United States. He whipped out a little copy of the constitution and a very dramatic, very stagey activity that was very direct attack. It was probably a very effective attack but i dont think it changes the issue. There are muslim jihadists in the world. There are people trying do harm to the u. S. And i saw on one of the morning shows today a calculation that every 84 hours during the last month theres been some sort an attack by muslim terrorists somewhere in the world. This is a real problem and it doesnt go away just because of the sacrifice that the son of the khans made of his life. Those are two separate things. My heart goes out to any mother who has lost her son, any father who has lost his son but it isnt really the issue. The issue isnt all muslims. The issue is the muslims that are trying to make trouble. All right. Wilbur, i want to thank for joining us today and would love to see new studio to talk more about the trade issues. I think its something well hear more about over the next 100 days. Im certainly going to try to make us hear more about it. Thank you. All right. Coming up, Google Parent Company alphabet getting into the Life Sciences business with glaxosmithkline. Dont worry. They are not being boumpt the plan is a 700 million bioelectric venture treatment. What does a bioelectric venture treatment mean . More on that after the break. Meantime, check out the futures. Dow jones indicating a mildly higher opening. The dow coming into august with a sixmonth winning streak, the longest in years. Squawk box will be back after this. Okay, so whats our latest data say . Our customer is a 21yearold female. Heavily into basketball. Wait. Data just changed. Now shes into disc sports. Ah, no shes not. Since when . Since now. Shes into tai chi. She found disc sports too stressful. Hold on. Let me ask you this. Whats she gonna like six months from now . Who do we have on aerial karate . Steve. Steve. Steve. And alexis. Uh, no. Just steve. Just steve. Just steve. Live business, powered by sap. When you run live, you run simple. Announcer when they test you, stand firm and move only when you hear the seatbelt click that says theyre buckled in for the drive. Never give up till they buckle up. Coming up, when we return google parent alphabet getting into the Life Sciences business and at the top of the hour former vermont governor and president ial candidate howard dean is also going to join former new york congressman rick lazio to talk about the race for the white house. Check out oil at this hour. Wti crude at 41. 15. More on the Global Markets straight ahead when squawk conditions in a moment. People have always bought cars. But we saw an opportunity in sharing cars. So we moved fast and launched car2go in 29 cities, all around the world. Doing that required dozens of data centers, designed for speed and performance. We built our business on the ibm cloud. Because thats what the ibm cloud is built for. A little zika this morning floridas Health Department confirming the first cases of zika likely caused from local mosquitos. Four people caught the disease in early july. Officials saying the area of concern is limited to a square mile in the winwood neighborhood of mime. 1,600 cases in the continental u. S. All a result of travel abroad and despite the warnings Congress Left for vacation without appropriating funds for zika. The republicans approved it in the house and democrats blocked it and a story in the New York Post today talking about how mosquitos are swarming the subways in new york. The warm and wet summer creating a bumper crop and city Officials Saying they are seeing more mosquitos than in years past. Different types of mosquitos and nonetheless worries continue about zika. We should also tell you glaxosmithkline and alphabets Life Sciences unit are teaming up to create a new company focuses on fighting diseases by targeting electrical signals in your body. Meg tirrell joins us now with a special guest. Meg, good morning. Good morning, becky. Joining us now is the chairman of vaccines at glaxosmithkline and now the chairman of newly created galvoni bioelectric next. Thanks for joining us. Thanks for having me. The first question we need to ask you is what are bioelectronics . Bioelectronic medicines are very small devices, the size of a rice grain, and that contains a lot of electronics in them that are able to either simulate or block the electrical signals that our brains sense through our nerves to control the functioning of our organs, and by doing that treat a number of diseases we have shown in a number of animal mod thats were able to associate chronic diseases like that. Able to show abnormalities in the electrical signals in the nerves. Not an entirely new idea. Things like pace parque which work with electrical signals. This is so much summarily and can you treat different diseases. It is indeed based on something that already exists and is common straight, stimulating or block nerve signals can impact a particular disease. What were doing here is were going very, very small at a nano scale and very close to the organs to make sure we only impact a given organ and through implanting the device very close to the organ on a nerve, you know, impact type 2 diabetes and asthma and inflammation. Lets take type 2 diabetes and how this would work for a patient. The patient would go to the doctor and the vision is to have a device thats implanted in the nerve just leading to the pancreas, and that device ultimately will be able to read the electrical signals that the brain is sending to our pancreas and that device may also be able to measure glue close levels in our blood and decide, for instance, to stimulate the blood to make more insulin. Tell us about the partnership with google. What did they bring to the table and why were they the right partner in. Really exciting partner. Discussing it over the past several months. A very common vision of integrating electronics and Big Data Analytics and technologies with medicines and biology and is the company in the Alphabet Group of companies dedicated to, that and they bring to us the engineering capabilities, the electronics, the low Power Technologies and the Wireless Technologies that are critical to the devices that power and extract information from them. We will be bringing the vision for bioelectronic medicines and of course our 300 years of experience in medicines and human biology. How big of a market is this potentially . We think about traditional drugs stimulating the chemical systems of the body. Could this be as big as our current medicines market now . Wildest dreams, frankly i think this is a whole new industry as big as the pharmaceutical industry possibly. Phamaceutics impacts biology and theres a whole new world that were opening dealing with electrical signals to connect with our biology and change our functioning. Weve shown in a number of animal models we can treat any chronic disease weve tested so potentially with a small number of different devices that we can implant on different nerves we may be able to treat a whole series of chronic disorders so it can be very, very significant. What are the limitations we have right now in making this a reality . The limitations are around sizing. They are very, very small. They are around power. Power requires energy and energy means heat and heat doesnt go well with biology so we need distant powering or wireless powering and another limitation or gatekeeper will be the surgical methodologies well use to implant the devices. Were integrating all the challenges into the way were designing the first generation device. Thanks for joining us today. My pleasure. Thanks for having me. Andrew, back over to you. Thanks for bringing us that conversation. When we come back weve got a different conversation on the table. The deal now is official and well get you up to speed on the details right after the break and former governor howard dean and rick lazio join squawk box in just a moment. Elon musks master plan, new this morning, tesla and solarcity combining in a 2. 2 billion deal. Decision 2016. Donald trump under fire after controversial comments about a Fallen Soldiers parents. While Hillary Clinton secures a couple of key endorsements from Business Leaders. We have the latest in the race for the white house straight ahead. A new harry potter tale hitting shelves in the world once again under the wizards spell. The final hour of squawk box magically begins right now. Magic, magic, magic live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box, everybody. This is cnbc, first in business worldwide. Im becky quick along with Andrew Ross Sorkin and brian sullivan. Joe is out today. Weve been watching the futures this morning, and last month was the second best month of the year for the markets. Youre seeing things start on a good note as well for the bulls. Right now the dow futures up by about 38 points and s p futures up by 3 and the nasdaq up by 9 and if you take a look at oil prices this is where a lot of people have been focusing. Check this out. Wti is down once again today. Its down another 30 cents to 41. 30. It was a decline of over 2. 50 for the week last week, and this is something that has a lot of people concerned as they start to wonder how much of this is a demand picture and what this means around the globe. Brian. Todays top corporate story tesla buying solarcity in an all stock deal worth about 2. 6 billion. Heres the problem though. Solarcity shares are at 27. 30, below the price it closed on on friday. A Conference Call of the two Companies Just Getting Started and well monitor for you and bring any highlights to you. And the other big transaction, uber merging its merge with rival didi in a 35 billion deal. Joining us now is ed lee. Has uber effectively thrown in the towel . They are throwing in the towel. I think also they were under a lot of pressure from their investors to start out the china side of the business because they are losing money over there. Losing 1 billion a year in sort of this protracted fight with the main rival didi which is a home grown rivaling service and they are both doing and paying out and making it cheaper for riders to ride those services to get market share. In the meantime they are losing money on every father. Ed, does this make any sense . You have uber which up until this morning was ostensibly worth 60 billion. By the way, a lot of similar investors and same investors in both uber and didi, now worth 35 billion. Does that math work anymore, or do you say we should be clear. That maybe the 60 billion is not there. The 60 billion now, referring more to ubers value outside of china, right . So they are trying to their china operations were a subsidiary or a separate valuation or had a separate sort of business and separate sort of Investor Group in a lot of ways and, you know, that part of it was just not doing well at all. Spending money, and with this dooep deal, uber gets a piece of this combined didi uber operation which has a slightly higher valuation and their overall valuation, the u. S. And the other operations are still worth 60 billion to 70 billion. The 60 billion to 70 billion valuation was always ex china . That did not include, that and this deal with didi now gives didi an investment in that uber proper the the uber outsider china operations and gives it a higher valuation or slightly higher valuation than what uber was at before so its a complex transaction. A lot of moving parts to it. The china piece was always weird, always unusual partly because they were operating under sort of the weird gray area that the Chinese Government created for ride handling services. Only cleared that up like a week or so ago and made it illegal which paved the way for this transaction between didi and uber. Both companies were lose money and when they combine or if they combine and this goes through it gives them both a chance or gives the combined company a chance to finally make a profit on each ride. And real quick, does this set up an ipo for uber . Yes. Also, again, the reason why uber investors were pushing for this deal or some kind of deal about china, it clears the books in a lot of ways or allows unier to spend more of their money in places where they are profitable in more developed areas. More developed areas around the world. Ed, we appreciate it. Other news thats breaking that brian has got. Thanks so much. Another day and another deal for verizon. They continue to transform their company. Verizon is buying little known fleetmatics for 60 a share or 2 hadnt 4 billion cash. In plain english, what they do is they help track basically kind of like an uberesque thing, gps management, what they call mobile Work Force Solutions and fancy slang for basically were going to keep an eye on you. This is a fat premium. If you own fltx, the stock closed at 43 on friday and a 60 share deal so youre looking at about 40 , 39 , 40 premium for fleetmatics and verizon buy aol and most of yahoo and fleetmatics. So verizon moving into this sort of Software Workforce and addriven Solutions Type business and also tracking your car. Great. Well continue to watch this as we hear a little bit more about it. Lets tell you about some of the other headlines as well. New york fed president bill dudley saying the markets should not be ruling out the possibility of another Interest Rate hike this year. Theres a caveat though if the United States economy improves significantly. He was speaking in indonesia earlier this morning and also warnings that lackluster Global Growth slimting the feds policy options and is urging caution on raising rates following the brexit vote and the big gains for the dollar as well. Goldman sachs is cutting its threemonth rating on equity to underweight. Its Risk Appetite indicator has turned neutral and that suggests markets are more jetblue to growth and policy disappointments. Doubleline ceo Jeff Gundlach says sell everything and says investors appear hypnotized and has gone maximum negative on treasuries. Gundlach likes gold and gold miners. Investors struggling to find value in the markets near record highs but socalled cheap stocks cost more than you bargain for. Thats what were looking at time. Mike santoli joins us today. Buying the cheaper stocks has been quite painful. Coming into the year saying ill buy the ten cheapest stocks based on the expected earnings for the year, youre down 9. 5 . Well take a look at the tale of that tape. Up 6. 3 for the broader s p 500. Some of the names, ford last year got hurt on a pretty disappointing result. It was one of the cheapest stocks in the s p coming into this year so you see that auto stocks look dirt cheap at least on the surface ant big airlines as well. Gilad sciences, goodyear also auto related. All of this is going on at a time when people came into this year value as opposed to growth investing should probably start to outperform. Its really been complete lit wrong bet. Why is that . People want more Stable Companies that are perhaps more expensive on earnings but bay a good dividend. We know that and we have a mature part of the market psych. Can you not rely on profits being there ahead and the question now hangs over it is this now the makings of finally that value resurgence when cheap gets cheaper. Ultimately it turns but its been very, very frustrating for value sensitive investors for a while now. Mike, thank you for that. Check out mikes full article on cnbc. Com. Meantime lets talk politics. The bat sonl. Hillary clinton and tim kaine touring the rustbelt while donald trump defended his criticism of the khan speech and his wifes silence at the dnc. His wife, if you look at his wife. She was standing there. Had nothing to say. Maybe she wasnt allowed to have anything to say, you tell me, but plenty of people have written that. She was extremely quiet and it it looked like she had nothing to say. A lot of people said that. Earlier on the today show mrs. Khan responding to trumps comments. I think it doesnt have anything to do with my religion. My religion doesnt prohibit me to do whatever i want to do for the goodness of mankind, for the goodness of myself, my family. Im very thankful ive brun born in this reek because it does not give me any prohibit me from anything that i dont want to do. And trump in turn weighing in on twit they are morning saying mr. Khan works does not know me, viciously attacked me from the stage of the dnc and is now all over tv doing the same. Nice well, joining us now with more on the long road to november, we can say nice as well. Former vermont governor howard dean and former new york congressman rick lazio who went theyd head with Hillary Clinton back in 2000. Good morning. What a bit of a crazy weekend. Again. Again. You look at this, and does this suggest i mean, this debate, is this going to come and go like every other debate that seemed like it was so out of sorts and then disappeared anywhere . I cant imagine donald trump getting into the debate of parents of a veteran who lost his life defending the country. Clearly he should have said, listen, i i feel for those grieving parents. They sacrificed. I applaud what their son did and move on. We had wilbur ross on this morning who is supporting donald trump and he was very supportive of donald trump even with these comments. This is a real problem. The problem here i mean, my own emotions with jump sort of aggravation and so forth and then sort of a little fear that he might win. Now its just contempt. If he wins, i think half the country have no respect for him whatsoever. And if Hillary Clinton wins that half the country is going to have contempt. They wont have contempt for her. Shes a competent, smart person. You may not like her but shes going to be a good president. This guy is a moron. This guy is a moral pig. Governor, you know, i disagree with that. I think a lot of people do have contempt for clinton. You travel country and a lot of people just say i cant trust her. Yeah. I disagree with that. You cant disagree. Its other peoples opinions. I disagree personally. But you agree theres plenty of people that feel that way. I think thats probably true. I would argue thats unjustified, but i think she does have a record of getting things done and has a record of working with republicans. Has a r0rd of standing up for the country. Shes somewhat hawkish on defense which i like despite my opposition to the iraq war. I think you have someone who understands what it is to be president. Trump has no understanding what his responsibilities would be. Do you think theres anything that she can do at this point that the country knows her, to the extent there is a trust deficit which clearly there is, for thundershower change that at this point . Theres an argument made i think in the New York Times right after her speech which said she didnt say try to say trust me, didnt say try to say like me. Just tried to say im more competent. Shes not going to change the perception and she may exacerbate it as more things come out over the course of the next 100 days which is haar far away we are of election day. Scandal hands over her like a nantucket fog and wherever she goes, the people she associates with, Sid Blumenthal or whoever it is that she will bring back into the white house, youve got dnc chairman ethically challenged so much so that she was removed as chair but then she was put over to the clinton campaign. What does that say to you about where they are . I think the bigger issue quite frankly is that the American Public 70 of the people think were on the wrong track so when you say happy days are here again which is what the Dnc Convention was, it was a well choreographed and well run convention, better than the republicans in many ways, but basically think tone dev. When 70 of the people believe that we are on the wrong track, when you have Economic Growth slowing, 1 growth the first half of the year, youve got homeownership at 51year lows. For the First Time Since they started tracking data, you have more Small Businesses that are failing than are being formed. There is a problem. The quality of jobs, the quantity haymes proved, the quality of jobs have deteriorated. You look at all these measures from the seventh year of an expansion, 70 , a candidate saying well bring you poverty same is in trouble. Why is that its a good point, but heres the thing. The right just says, well, email server, email server. The left says russia, putin. Thats all were hearing now. The email server on one side and putin on the other when to your point weve got all these Economic Issues nobody seems to address. It takes more regulations in new jersey to become a hair weaver than a truck driver. Cant even start a business that basically has no startup costs and all were talking about putin is the email i agree its a flaw im speaking for the republicans. Six of the seven highest regulatory years have been under the obama administration. Last year there was over 150 regs that just affected Small Business. This is where youre dampening growth. People cannot justify starting a new business or staying in business when you keep getting things thrown at you from the federal government. Look, i think theres some truth to the notion that were overregulated but i think the real problem is the problem that Bernie Sanders had his finger on which is the distribution of wealth has gotten really skewed. In a capitalist society, if it doesnt work for everybody it eventually wont work and thats been the downfall of a lot of capitalist societies. If we want to make this work we have to change the tax code and instead of investing in collateralized mortgage obligations were investing in roads and schools and bridges to create jobs and youve got to make itsier for people to start a business that makes things instead of a hillarys response is raise Capital Gains for Small Businesses, and double the tlat most Small Businesses are paying. What shes talked about wait a minute. Let me explain why this is a good idea. The problem its not Small Businesses, its big business. The problem with the Capital Gains rick, let me finish. The problem with the Capital Gains situation now is that you go in and you make your hit after a year and you take out at a low tax rate. I would make the capital tax rate zero if you invested for five years because you create something more than fiddling around with stocks and bonds. Stocks and bonds are all fine and good but that does not benefit ordinary average people. Just talking about make sure that people are longterm investors. That create jobs instead of pushing paper around. Youve got to extend the Capital Gains tax and makes it zero. Why tax anybody if they are going to create jobs. Why do you want the federal government to engineer Holding People . That drives behavior. When many businesses all they need is a year of holding in order to be able to especially in a world that were in right now where youre seeing assets, including intellectual assets, not need be held for this long. The kinds of businesses that get held for a year do not create jobs. The kind of businesses that get held for six years and built patiently do create jobs. As an investor you can make that decision. Its not for the federal government to decide. Then why have a Capital Gains tax at all. Why not charge income tax for everybody. We ought to have a favorable rate for capital investment. This is not capital investment. Its poker. If you look at whats dragging the economy right now the last couple of quarters, its been a lull in Business Investment, down dramatically both quarters. You think increasing taxes which is what hillary wants to do is going to encourage more businesses shes not increasing taxes. She want to drop taxes for people who invest to create jobs. Shes not dropping taxes. Youre doubling taxes for Small Business and Capital Gains rate to an ordinary income rate plus the obamacare and medicare. And dropping it. If you dance to her song. Another Big Government a great debate. We have differences of opinion, respectful ones which is nice to see these days. You know, having a lot of conservative friends and liberal friends as well, the conservative friends i talk to say the same thing, not really on board with trump but im terrified with what Hillary Clinton will do with the Supreme Court. Thats the other thing i hear all the time. What do you think will happen with the Supreme Court . I think she will put people on who arent going to be interested on getting rid of the Voting Rights act which is probably something that should never have happened. I think she will put people on who will get rid of Citizens United which is ruining the political atmosphere in this country . A lot of republicans would agree with that as well. Money and politics dont go together. Its not the money in politics, its the message to the American People if you have a lot of money youre worth twice this whole country was founded on the notion that everybody was created equal and the Supreme Court said thats not true. Insane to have people like that on the Supreme Court. I dont think Hillary Clinton will put a lot of people who are way on the left. You dont see the Supreme Court going super liberal. Thats the one thing you do her. She is not super liberal. If you look at her Foreign Policy, shes i think more to the center than barack obama is. She made dealings with the republicans. We were talking earlier in the green room, she supported republican banking bill, not because she loved the bank bill but she made a deal to protect single mothers with small children in the banking bill and vote for the republican banking bill for which Bernie Sanders argued with her and criticized her form. I think shes a pragmatist who knows how to deal with both sides of the aisle. Final word. With Hillary Clinton you get more of the same. If you thought the last eight years for barack obama were good for the economy and national security, look forward to Hillary Clinton. Most people reject that. Feel it in their gut. Businesses are not making investments and they dont like to hear taxes are going up, regulations increasing, well stack the Supreme Court with people who are making partisan decisions to to validate this regulatory tax model. They want people that are going to obey the law and obey the constitution. Gentlemen, thank you guys. Spicy. You didnt have to do any work. Come on back. This is great. Ill just sit here and lean back. That actually means you gave that actually means we did our job appropriately. Stayed out of it. Let you guys argue. Thank you so much, gentlemen. When we come back face the science. Ceo Elizabeth Holmes making her first public appearance since being banned from a medical lab. Well head down to the conference where shes speaking. Thats coming up right after the break. Announcer alvin and the chipmunks want to remind you bacteria can hide in food and make you ill. Wow announcer but you can keep bacteria from ruining your day with 4 simple steps clean, separate, cook, and chill. The roadchip to food safety starts at foodsafety. Gov. Keeping the power lines clear,my job to protect public safety, while also protecting the environment. The Natural World is a beautiful thing, the work that we do helps us protect it. Public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. We want to keep the power on for our customers. We want to keep our community safe. This is our community, this is where we live. We need to make sure that we have a beautiful place for our children to live. Together, were building a better california. Welcome back toe squawk box. The cleanup sunday way in maryland. Flash floods ripping through the story of elikot, kind of antique shops, two are dead and hundreds others had to be rescued. Look at the video. Heavy rains on saturday and six inches falling in two hours. A months normal rainfall in 120 minutes. Four homes were destroyed and 20 or 30 other structures were damage the. Guys, you can see this is the most dramatic video which is a real hero. Three glinksed arms and were trying to pull a woman out of the car and just as she basically almost gave up and said i cant do it the third guy closest to her let go, grabbed her and almost was swept away and a lot of scenes of individual heroism in ellicott city, maryland, really a neat walking town and the river just flooded. People there for decades said they have never seeing anything like this, a very unusual situation. Terrifying video. We should also be tell you Elizabeth Holmes make being her first public appearance since getting banned for operating a clinical lab. Meg tirrell joins us from philadelphia and well be hearing from her later today. Thats right, becky. A crucial moment for theranos. Today marks the first time when ceo Elizabeth Holmes will present for 40 minutes about the technology and then take questions for 45 minutes from the thousands potentially of Laboratory Experts high in attendance at the American Association for Clinical Chemistry conference in philadelphia. Many of these experts who have spent their lives in Laboratory Medicine are not happy that shes presenting here. Lets take a look at how we get here for theranos. We know it was founded in 2003 by elizabeth hole whms she was 19 years old and had dropped out of Stanford University and step years later they opened their first Clinical Labs and in 201 given a valuation of 1 billion based on privately ran money and then the stories started to unravel after 2015 after a wall street journal investigation raised serious questions about the technology underlying what theranos promised. Essentially this promise of doing the routine blood tests of tubes of blood drawn from our vains. They promised to do that with a finger bricks worth of blood n. January 2016 federal regulators started to get involved and did an inpex of the theranos California Laboratory and found severe deficiencies and in march they warned they may impose severe sanctions on theranos if they didnt fix those. That same month a big study came out in the journal of clinical investigation from mt. Sinai raising the accuracy of the theranos tests compared with competitors of Quest Diagnostics and lab corps. Theranos withdrew or voided two years of test results and in 2016 walgreens terminated its relationship shutting down the 40 Wellness Centers theranos ran through walgreens and then finally the big issue july 2016, just last month, we saw that twoyear ban be imposed on Elizabeth Holmes from operating labs in the industry. The company had 60 day s s to address that and today is a crucial time to prove to the Conference Full of experts that they have reay god something. Thanks so much for that and looking forward what happens. When we come back, heading back to hogwarts and a new harry potter book and j. K. Rowling weighing in on the future of the series. More about that when we return. Can a toothpaste do everything well . This clean was like pow. It felt like i had just gone to the dentist. It just kind of like, wiped everything clean. My teeth are glowing. They are so white. Crest [hd]. 6x cleaning, 6x whitening. And at two weeks superior sensitivity relief to the leading sensitivity toothpaste. I actually really like the two steps crest [hd]. Step 1 cleans, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. We binge it, crave it and stream it and share it. More video contempt for more people on more devices than ever. Cnbc. Com presents binge with carl quintanilla. Its the darkhorse we havent seen yet. A Digital Series helping you navigate the changing media landscape. An amazing story. Oneonone with the hottest talent, binge and new episodes streaming now at cnbc. Com binge on apple tv, hulu and youtube. Welcome to my house baby, take control now we cant even slow down we dont have to go out welcome to my house welcome to our house, its called squawk box, everybody. Heres whats making headlines. Verizon striking yet another deal. This time they are buying a Company Called fleetmatics a provider of Fleet Monitoring Software systems. That price is 60 a share and cash and 2. 4 million. A nice 40 premium for shareholders. This comes a week after verizon announced it was buying yahoos core assets and a year after it bought aol. Heres something you dont see often these days and an upbeat Earnings Report from an oilrelated company. Diamond offshore reporting profit of 16 cents a share. Well above estimates of three cents. Cutting costs has helped their profit there though that stock has been in pain the last few years. Meantime the gambling slump in macau continues. July revenue was about 2. 2 billion, down 4. 5 from a year oak and muggles around the world making the latest installment of harry porter disappear from stores. Harir the harry porter and the cursed child released in stores this weekend. The book was greeted by long lines of fans and release parties and rowling confirming the end of the harry porter series telling reuters, quote, harry is done now. Ah. No. Harry potter and the vanishing profits. Big disappointing gdp numbers out friday, well below expectations. This week were counting down to jobs friday and joining us now to talk about the mac cotrends he sees in the global and u. S. Company dr. Jeffrey sachs of Columbia University and a special adviser to u. N. Secretarygeneral ban kimoon. Doctor, thanks for being with us today. A pleasure. Lets talk about what we saw with gdp because that can create huge ripple effects. Growth was 1. 2 versus the 2. 5 or better than a lot of economists had been expecting. Did it catch you by surprise . Well, were in a slow growth period so in general that slow growth continues, but this was even slower than the slow growth so weve been expecting around 2 , but weave now had two quarters of around 1 and thats very weak. Business investment is especially weak, and were in a stagnant economy with very low investment. A lot of Downside Risks, and i think a lot of people waiting also for november. What do you think is happening beneath the surface . Why are businesses not investing at this point and why are they reluctant to do so . Over the longer Term National saving and investment have been on a longterm downtrend so nothing dramatic is happening except the increasingly slower, slower, Slower Growth of the economy, so our potential growth rate has probably declined to around 1. 5 to 2 because we have very low net savings in our economy. The government net saving is negative and has been chronically now for years. The private saving is also quite low, so thats with us as an underlying fact, but in the near term there are huge uncertainties. The whole World Economy is a big question mark. Whats happening in china, brexit, our crazy elections here so everybody is taking a pause. A political question for you. Youve been supportive for the most parrot think of Hillary Clinton for for president , and yet higher we have a situation where the economy has not been growing, as you just said, as fast as nearly anyone would like. Rick lazio was just on and said, look, Hillary Clinton is effectively saying shes going to do or continue the last eight years of barack obama. Do you look at the last eight years of Barack Obamas presidency and say this is a good economy . Well, i was a Bernie Sanders supporter originally just to be clear and now im supporting Hillary Clinton, and i regard the last eight years as mediocre at best. I dont think that there has been a growth strategy. There was a recovery from the crisis, but there hasnt been a real growth strategy. I dont know whether Hillary Clinton has one, but im quite sure donald trump does not have one. You were supporting Bernie Sanders before, but what he was planning on spending, i mean, those are numbers that most economists when they look at thought, wow, this is something that could bankrupt our society. How do you kind of get your head around the idea of thinking that he had responsible plans heading into this . Well, lo and behold, unlike almost everyone in this country, im for significantly higher Tax Collections as a share of gnp because i think government has responsibilities and i think we ought to pay for those possibilities through taxation, so our total tax take in the United States is 30 of gnc if you add up federal, state and local and in countries like i admire in the scandinavian countries its 45 . Im not saying thats what were going have in the United States but the idea that were where we are or that we need new further tax cuts i think is completely backward. When i come back to this country from traveling abroad, which i do all the time, our first joke with my wife is we get off at ken dimp the elevator is not working, the escalator is not working and the infrastructure is completely broken down but thats true of everywhere in this country. We havent invested for a generation. Infrastructure spending is one thing and thats something that both sides of the aisle tend to agree on. And we need to raise taxes to pay for it. Particularly at a time when you have low Interest Rates but raising taxes to those levels, in europe weve seen very slow in decade, too. Higher taxes, a lot of people are worried that will make it tougher. In Northern Europe theres high prosperity and its shared across the board. Small country, homogenous. Germany is 85 Million People and its a very prosperous economy. Germany has prospered very well because of the euro because its taken the southern countries and gotten a discount on its we have an idea thats been in play now for 35 years, that the way to happiness is tax cuts and weve reached who do you raise taxes on . V. A. T. For the long term. You do think a v. A. T. Should be added. Absolutely. Most middle class people will tell you they are overtaxed and hear that all the time. State taxes have gone up. Sales taxes have gone up. Property taxes and on that basis they are right but the dirty little secret that no candidate will tell you is that mid the middle class is paying the lowest federal income tax burden in its history, according to the center for budget priorities, a left leaning organization. The federal income tax burden after deductions is a 50year low. Theres not enough people the poor dont have any money, the rich, theres not enough of them so if we follow your strategy what politician has the nerves to say im sorry, middle class, your taxes are going to go up but youll get better roads. None so far. Not since 1948 because thats what Walter Mondale said. He was decisively defeated by reagan and since then weave been on the same path and we have broken infrastructure. We have broken everything, and in these countries that i like which nobody likes to be closely at . They pay a higher v. A t. Because then they get Bernie Sanders free tuition with quality higher education. You think a v. A. T. Would ever happen. Its a regressive tax. But the other thing, too, beck, im not supporting a v. Air. T. , it does capture. Mildly regressive tax but you use it for progressive spending. You use it to ensure that everybody gets decent education, gets quality infrastructure. Would you support this, because the v. A. T. Does collection, 15 of the underground economy . Would you support v. A. T. If there was guaranteed no income tax rates . Zero income tax. No more income tax rates, the fear is you give me a v. A. T. And youll raise my income tax. Basically Something Like that. Dr. Sachz, thanks for coming in. Lets continue. Complicated issues. This is great. Thank you. When we return merger monday. Tesla officially buying solarcity for 2. 6 billion. Headlines from the Conference Call going on. More on uber and didi. Back in a moment. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade freshly made in the tokyojapanese tradition, each batch is small. Special. Unique. Every bowl blurring the line between food. And art. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbysteprecipes. Delivered to your door, for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. Welcome back to squawk box. Tesla buying solarcity for 2. 6 billion. Phil lebeau joins us with more highlights from the Conference Call. Phil . Reporter andrew, that Conference Call is still going on right now. Elon musk along with executives from solarcity answering questions from analysts, analysts who have covered both tesla as well as solarcity. Heres the deal thats been announced. This still needs to be approved by a majority of the disinterested shareholders from both tesla as well as solarcity, a 2. 6 billion all stock deal where essentially solarcity shareholders will get. 011 shares and valued out at about 25. 37 per solarcity share. On the Conference Call they have been talking about 150 million in synergies that they have identified, basically everything from the manufacturing process, to the generation and the giga factory all the way through the manufacturing of storage panels, storage devices. They believed it will be onestop shopping so you buy your tesla automobile and you get your solar unit installed in your house and you get your storage pack, your power wall installed at your house. They believe that is an appealing combination. They expect this deal to close later this year. Again, it depends on majority of the disinterested shareholders of both tesla and solarcity approving the deal. Keep in mind that means elon musk who is the largest share holder in both companies, hes not going to be investigate on the deal and he says hell abide by with whatever people want him to dorm. Believes this is the right combination and right time for tesla to make the deal. Guys, back to you. When we return, jason bourne is born. The matt damonled sequel taking in 60 million at the box of course, second highest opening of the bourne series ever. More from hollywood when we come right back. Universals jason bourne dominating the box office this weekend. I was there, but not all sequels are faring so well and Julia Boorstin joins us with that story. Reporter the bourne franchise it its best International Franchise ever grossing 110 million worldwide. Though its u. S. Debut of 60 million was 10 million less than the 2007 bourne film and that doesnt even include inplaying. Studios are saying that they cant count on sequels for ever larger returns. This summer the u. S. Box office with sequels is 26 lower than last years at this point. Analyst Barker Crockett writing Second Quarter 2016 will be remembered as a time when sequels, else especially those not featuring superheros, came up short referring in part to Ninja Turtles just out of the shadow half of the 2014 reboo. Viacom warning the companys results would be impacted by teenage mutant Ninja Turtles underperformance. Other disappointments including neighbors 2 and Disneys Alice through the Looking Glass and even paramounts star trek beyond Opening Weekend brought in less than the first two films and foxs collision course had the worst open in the series. It is a tale of extremes. Finding doer and captain americas civil war are the two biggest films, both from disney and the latest purge film is outperforming the prior two movies. With so much contempt available on demand studios cant count on familiar characters to get people to make the trip to the movies. Word of mouth and savvy marketing are increasingly important. Becky . I was going ask you this. If you look at this, a lot has to be there are so many other competing places for peoples attention these days and may not be a problem with the sequels and may be a problem trying to convince people to spend their time and money in the move theaters versus all these other places. Well, i think the benefit of sequels is that familiar brands break through the clirt and something that has an advantage when it comes to market. Oh, i remember jason bourne, but the fact is that now its not just i remember jason bourne. Did i like jason bourne . Was i happy with the first movie . Did i want to go back . Were the reviews good . Hearing good things from my friends who saw it the first night so movies like jason bourne have done well and so many films that were really surprise disappointments because the first ones did great Like Neighbors 2. I saw neighbors 2 and really liked it and didnt do as well as the first up. People can stay home and stream on netflix. It isnt necessarily a sure thing that people will be going out to the movies every weekend. Julia, thank you very much. Good to see you. Good to see you, too. When we come back, jim cramer will join us live from the new york stock exchange. Well get his take on todays top stories. By the way, check out the futures this morning. So far so good for the bulls. Dow futures up by 30 and squawk box will be right back. The heirloom tomato. Intenselyflavored. Colorfullydiverse. Beautifullymisshapen. Cultivated for generations, its the unexpected hero of any dish. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbysteprecipes. Delivered to your door, for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. To the new york stock exchange. Jim cramer joining us. What is the focus for your day on this fine monday . I think that weve got a couple, we have a takeover, this verizon. We have this biogen deal. These are basically saying once again, theyre companies looking. This verizons become one of the most in. Chris tive companies around. Also trying to put the uber decision in a context so that apple seemed pretty smart making its investment, so its still takeovers and a kind of sense that people just feel that this market is do nothing, but individual companies are taking advantage of it. Everybody focuseded on yahoo in the verizon deal. The thing i was wondering, verizons a dow component. Here they are making 10 billion in deals in the last a 15 or so months. What are they trying to become . Fleet . I think theyre try iing to extend the reach into a lot of different businesses. They have a business which does well when theres a lot of data consumed on the internet. They have a, this is a softwares Service Business that controls fleets. Verizons got a huge fleet, but there are a lot of Different Companies that have fleets. It allows them to control it better. I dont know, verizons becoming kind of a catch all to a lot of different toenlgs, its like lets see what sticks. Identify got to tell you, after att bought directv, look at that stock. Maybe verizon feels its got to do something and remember, the prices may be going up. Were starting to see that, because theyre just used to be the end of the price war. I saw you tweet about bob dudley, the markets over dudleys not trying to say anything,er time someone says something, they are try in many case, to say nothing. Bob rubin once told me, listen, you can come, hear me, aisle let you interview me, but im not making news so, if i think youre telling me and showing people that i am, youre done. Youre cut off. And i always thought thats kind of like what a lot of people at the fed do. Listen, were not making news. The ceoobp, not bill, the fed guy were talking about, so basically, its this. Go give a long interesting speech, but say nothing. Just say listen, were in sync with what the fed chairman says. No discord here. I think dudleys a team player and i think we want to find something that what a fed is up to, but dudley doesnt necessarily have to do that and he didnt. Those who think he did, i think they violate the bob rubin rule. Were not making news here, just telling you stuff. I think thats what people are misinterpreting. Well said, you did say much. See you in a few minutes. Coming up, this mornings biggest stock movers and later today, our exclusive interview with jamie dimon, thats right at the top of power lunch. Wilfred is out west, hes going to sit down with mr. Dimon, 1 00 p. M. Youre watch cnbc. Announcer todds a great guy. I mean, look at him. What. A. Sweetheart. Attaboy. Wait, todd, what are you doing . How totally selfish and untoddlike of you. Come on, todd, come on, man. Youve got to keep your eye, i know its odd, but u on the italian banks. This follows friday nights release. Unicredit, down 7. 5 . Down 4 . Some are down 50 to 75 this year. And monty was one of the one that struggled the most under the scenario for the stress test. Obviously trading at 32. Keep in mind though that the stress test did not include a brexit scenario. Kind of why do them. Either way, italian banks have been weak, continue to get weaker. The other one thats up in monte. A programming note tomorrow on cnbc, do not miss another big exclusive interview. This with the Prime Minister of italy. His take on his nations Banking System in the wake of these European Bank stress tests. A couple other stocks to watch today. If you havent heard, tesla is buying solarcity in a deal worth about 2. 6 billion. The shares at 25. 37 apiece has stocks trading down because it has closed above that price, so again, the deal came in a little below what investors had been potentially anticipating. Also, verizon is buying fleet. The price is 60 a share in cash or about 2. 4 billion. This comes just a week after verizon announced it was buying yahoo s core assets as well. Instagram rolling out a new tool to combat bullying. Users will be able to filter comments and ban certain words from showing up in their comments. The new policy will first be available for the popular accounts followed by all accounts in a few months. That does it for us today. Brian, thank you for being with us. Ill be with you tomorrow, too. Well see you tomorrow and later today on power lunch. Right now, time for squawk on the street. Good monday morning. Welcome to squawk on the street. At the new york stock exchange, welcome to august. Where history says stocks struggle more than any other month on the dow. Busy week. Tesla and uber in the news. Earnings, ism, jobs number on friday. Watch european markets, bank of england decision on thursday. Anthony oil remains weak within a dollar of three handle now. Goldman sachs downgrading global stocks. How worried should you be . Tesla making its merger with